Online sales tax calls dismissed by the Treasury

The Treasury has written to the chief executives of the UK’s biggest pureplays to tell them a specific tax on internet retail will not be introduced, The Telegraph reported.

In a letter to the chief executives of Ocado, N Brown, Shop Direct, Boden, Appliances Online and Notonthehighstreet.com, the Treasury said the Government favoured “an approach which aims to ensure common principles apply to all businesses whether operating online, from physical premises or with a combination”.

Ocado chief executive Tim Steiner told the Guardian: “We are delighted that the Treasury is against placing an extra burden on innovative industry operators in the most dynamic part of the economy.”

Steiner was among the signatories of a letter to the Chancellor earlier this year which fiercely opposed a tax on etail.

Retailers including Sainsbury’s chief executive Justin King and Morrisons boss Dalton Philips have called for a tax on pureplays to address an “unlevel playing field” between competitors with physical stores and those without.

British Retail Consortium director general Helen Dickinson said: “The whole question of an online tax has had a lot of coverage but it’s not the place to start.

“It’s important that common principles should apply to all businesses – but the principles that apply at the moment are from a bygone age. Business rates in particular have long since ceased to be fit-for-purpose. It’s time to acknowledge that there is a broad consensus around the need for reform.”